Full text: Konvolut The Personal Distribution of Income 1

Postscript 1988. 
A considerable part of the household saving takes the form of 
contributions of employers to the pension funds and of premium 
payments of employees to life insurance companies . From the point 
of view of effective demand this should,in general, make no 
difference.lt is in any case saving,invested in financial 
assets,only the household does not have full and direct control 
over it at any moment of time. From a statistical point of 
view,however,a few complications arise.The U.S. National Income 
and Product Accounts (briefly NIPA) as well as the Flow of Funds 
(FF) of the Federal Reserve credit the assets of the pension funds 
as a whole as well as the policy reserves of the life insurance 
companies to the households. The implication is that the funds do 
not make any saving,all accumulation is credited to the household. 
In accordance with this approach the employers contributions to 
pension funds and the life insurance premia are defined as labour 
income (supplement to wages and salaries) and since they are not 
deducted when the take home wage is calculated they are also 
included in disposable income. A subsidiary feature of the 
approach is that the benefits paid out by the pension funds and 
life insurance companies are not credited to disposible income,but 
instead the investment income (interest) of the funds and life 
insurance companies is so credited.If the two are not equal the 
balance goes to the households disposable income. 
As already mentioned in this paper the two systems of data, the 
NIPA and the Flow of Funds, give different estimates for the 
household saving. The difference was formerly relatively 
modest,but in the 1980s the estimates diverged very strongly. 
The divergence is identical with the statistical discrepancy given 
in the Flow of Funds which amounted to $40 to $90 billions per

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